The Blind Who Will Not See: The President, the Secretary of Defense, and the Iranian Death Spiral

I sometimes wonder where some of our smartest people get their ideas. Take Defense Secretary Bob Gates, for example. Discussing the possibility of military action against Iranian nuclear weapons facilities, he said: “And if it's a military solution, as far as I'm concerned, it will bring together a divided nation, it will make them absolutely committed to attaining nuclear weapons and they will just go deeper and more covert."

I don’t get it. Is there some sort of evidence? What could it possibly be, aside from the sort I get from my Ouija board? So I try to imagine one of the tens of millions of Iranian opponents of the regime. Perhaps he’s got a relative in prison; he probably knows people who have lost a family member or two to the regime’s killers and torturers. He dreams of a free Iran, of an end to the humiliating circumstances in which Iranians now find themselves: widely considered to be terrorists, barbarians, and savages. And then one day somebody blows up a bunch of nuclear labs, some secret military installations, and RG headquarters in the major cities. Does that guy now rally round the supreme leader? I don’t think so.

Not that I’m trying to talk Gates into bombing Iran; quite the opposite, in fact. Our greatest weapon is political, and consists in the overwhelming majority of Iranians who hate the regime. If we supported them with vigor and a sense of humor, I think the regime would be overthrown and we wouldn’t have to worry about the “military option.” But we don’t hear any vigorous support for the democratic opposition from this administration. And more to the point, nothing concrete is done for them. (I can tell you a few stories about OFAC’s refusal to permit would-be supporters to help the Green Movement, for example).

In the old days, Gates was a great analyst, but I think he has decided to be a blind man when it comes to Iran. He said a few other astonishing things as well. “We even have some evidence,” he said, “evidence that Khamenei is beginning to wonder if Ahmedinejad is lying to him about the impact of the sanctions on the economy, and whether he's getting the straight scoop in terms of how much trouble the economy really is in."

I think I can help the secretary of Defense here: Supreme Leader Ali Khamenei doesn’t believe anything President Mahmoud Ahmadinejad says about anything. He knows he is not going to get the straight scoop from the man most Iranians refer to, not with great affection, as the chimpanzee. Khamenei only listens to a handful of people, including his son and designated successor, and members of his inner circle who have names like Larijani and Jaffari.

For the record, Khamenei said today that he and the Chimp get along famously, and the sanctions aren’t affecting much of anything in the Islamic Republic.

Khamenei's lying. He knows that the country’s going to ruin. Just read this, which tells of a secret analysis prepared for Khamenei, and which predicts the total collapse of the national economy in the near future.

According to Les Echos, oil income, which constitutes two thirds of the country's income, was harmed by the departure of the Western companies after they were forced by the United States Treasury to choose between their interests in the U.S. and those in Iran. The French Total, Dutch Shell, Norwegian Statoil, and Italian ENI companies suspended their investments, and the Japanese Inpex may do the same shortly. Lack of foreign maintenance and spare parts affected oil production, the rate of which decreased from 4.2 million barrels per day in the middle of 2009 to 3.5 million barrels in the summer of 2010.

Even the Turks are failing to deliver on their promise to supply gasoline (of which the Turks normally provide half); they stopped deliveries at the end of August. The fuel now comes from Turkmenistan, China, and Venezuela, or is smuggled in from Iraq.

At the end of September, the Korean Kia and German Thyssen followed Daimler, Toyota, Caterpillar, and Hewlett-Packard, and suspended their activities. Munich Re, Allianz, and Lloyds now refuse to insure cargos and planes that transfer supplies to Iran, while funding foreign trade is becoming more complicated, since most of the banks avoid all contact with Iran.

The banks in the UAE, which half of the Iranian import goes through, broke off all connections with the country two weeks ago, leading to a shortage of dollars (and a sudden increase of the dollar rate to 10.900 rial). On Saturday, the regime warned that it will suppress the demonstrations and strikes by the merchants that will most likely break out after the costly subsidies on consumption of food and fuel products (10 percent of the GNP) are cancelled...